A legislative effort in Massachusetts to jack up the state’s efficient tax fee on gross income received by on-line sportsbooks within the commonwealth failed on Thursday.
Massachusetts state Sen. John Keenan wished the state to obtain extra money from on-line sports activities betting operators like DraftKings and FanDuel. His movement to extend the state’s tax on their operations from 20% to 51% failed within the Boston capital this week. (Picture: State Senator John Keenan)
State Sen. John Keenan (D-Plymouth) proposed rising the web sports activities betting tax from 20% to 51%. The lawmaker advised the regulatory modification might be tacked on to the state’s 2025 price range invoice that the chamber was deliberating.
Keenan reasoned that the state wants extra income from playing to fight societal points cellular betting is bringing to the commonwealth because the business matures and continues to increase.
The general public hurt points are going to get to this point forward of us except we act. We’ve got an obligation to all of the residents and taxpayers of the commonwealth of Massachusetts to make use of no matter revenues we are able to from the business to stop the harms from occurring,” Keenan mentioned.
His colleagues disagreed. After Keenan raised the sports activities betting tax suggestion, the chamber voted down the proposal and moved ahead with the price range invoice evaluation.
Sports activities Betting Enterprise
Authorized, in-person sports activities betting at Massachusetts’ three casinos started on Jan. 31, 2023. On-line sportsbooks went reside on March 10, 2023.
By 2023, Massachusetts collected almost $93.9 million in taxes and assessments from licensed sports activities wagering operators. Of the sports activities betting tax, 45% is allotted to the Common Fund, 17.5% goes to the Office Funding Belief Fund, and 27.5% is directed to the Gaming Native Help Fund.
Massachusetts’ Public Well being Belief Fund, which was established to allocate monetary sources for the analysis, prevention, and remedy of the dangerous results of downside playing, receives 9% of the sports activities betting tax. That has amounted to about $8.44 million since sports activities betting started.
The remaining 1% of the sports activities betting tax is for the Youth Improvement and Achievement Fund.
Massachusetts’ retail sportsbooks at Encore Boston Harbor, MGM Springfield, and Plainridge Park are taxed decrease at 15%.
Charlie Baker (R), now the pinnacle of the NCAA, signed Massachusetts’ sports activities betting invoice into regulation in August 2022. In his new position, Baker has advocated for state governments the place sports activities betting is allowed to ban bets involving the efficiency of particular person school student-athletes, or participant props. Such wagers are already prohibited in Massachusetts.
Tax Will increase
Though Keenan was an outlier in supporting a push to lift the state’s tax fee on cellular sportsbook operators within the Massachusetts State Home, he isn’t alone in states that permit on-line sports activities playing.
Lawmakers in Ohio raised the Buckeye State’s tax on on-line sports activities betting income in 2023 from 10% to twenty%. Proposals to lift web sports activities ebook charges are circulating in Illinois, New Jersey, and Washington, DC.
An evaluation carried out by monetary providers web site LendingTree revealed lately that authorized sports activities betting within the 38 states and the District of Columbia final 12 months generated tax income of just about $2.5 billion.
New York benefited essentially the most, with the state gathering about $876 million from its on-line and retail sportsbooks. New York taxes on-line sportsbook income at 51%, as Keenan had proposed in neighboring Massachusetts.
